Why First-Generation Millionaires Can Struggle to Spend Their Wealth

“In my line of work, I frequently encounter individuals who, for lack of a better phrase, started from the bottom. These are folks who, like my dad, began their financial journeys with a scarcity mindset, and even now, as they find themselves in the realm of two-comma wealth, they don’t identify as millionaires and don’t consider themselves wealthy. Many remain trapped in that scarcity mindset. It’s a curious phenomenon—one that profoundly influences their financial decisions and limits their willingness to fully embrace the opportunities their wealth affords.

This scarcity mindset has a far-reaching impact. It affects the risks they’re willing to take, the subsidies they’re hesitant to relinquish, and the budgets they’re comfortable with. Their past struggles and experiences have left a lasting imprint on their financial outlook, deeply influencing their views on money and abundance.

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Take my own parents, for instance. They’re now well into two-comma wealth, but when I suggested they invest in a nice porch for their vacation home in the Poconos to make it more enjoyable and safer as they get older, my dad just couldn’t stomach the idea. He feels guilty about spending the money, even though he can easily afford it. The penny-pinching ways that got him to two-comma wealth now have become a stumbling block to him enjoying it. He loves the outdoors and the fresh mountain air, and an open-air porch would undoubtedly bring him and my mother a lot of joy. But he continues to hold on to the old adage that if you watch the pennies, the dollars take care of themselves, and spent a year negotiating over the details of porch costs with different builders.

I shared with him what I shared with you earlier in this book, that time is money too. We had a candid conversation about the reality that there is only so much time we have left in this world. We talked about how a year of negotiating over a few hundred or even a few thousand dollars was costing him lifetime enjoyment. For my dad, there was a mental block there. It was a fear of embracing and utilizing wealth because he felt like he needed permission to spend or else he was squandering money. I’m happy to report, after that conversation and some helpful piling on by my sister, they have their porch and enjoy every moment spent on it.”

“The penny-pinching ways that got him to two-comma wealth now have become a stumbling block to him enjoying it.” — George Stefanou

When Financial Circumstances Change Faster Than Financial Identity

The discipline that helps someone build wealth can remain valuable long after their financial circumstances change. But habits formed during periods of scarcity may also influence spending, risk tolerance and the ability to enjoy financial success.

The objective is not spending for its own sake. It is making sure present-day decisions reflect present-day resources, goals and priorities rather than being governed entirely by conditions that existed decades ago.

Questions to Consider

• Which beliefs about money came from periods when resources were scarce?

• Are those beliefs still appropriate for your current circumstances?

• Does spending create anxiety even when it comfortably fits within your financial plan?

• Are there meaningful experiences you routinely postpone despite having the resources for them?

• How can you preserve the discipline that helped create wealth without allowing fear to dictate every decision?